In Selenoth, the race of Man is on the ascendant. The ancient dragons sleep. The ghastly Witchkings are no more; their evil power destroyed by the courage of Men and the fearsome magic of the Elves. The Dwarves have retreated to the kingdoms of the Underdeep, the trolls hide in their mountains, and even the savage orc tribes have learned to dread the iron discipline of Amorr’s mighty legions. But after four hundred years of mutual suspicion, the rivalry between two of the Houses Martial that rule the Amorran Senate threatens to turn violent, and unrest sparks rebellion throughout the imperial provinces. In the north, the barbarian reavers who have long plagued the coasts of the White Sea beg for the royal protection of the King of Savondir, as they flee a vicious race of wolf-demons. In the east, the war drums echo throughout the mountains as orcs and goblins gather in great numbers, summoned by their bestial gods.
And when the Most Holy and Sanctified Father is found dead in his bed, leaving the Ivory Throne of the Apostles unclaimed, the temptation to seize the Sacred College and wield Holy Mother Church as a weapon is more than some fallen souls can resist.
We’re working hard on getting the ebook out on December 1st. The hardcover won’t ship for about two weeks after that, so if anyone spots any errata of any kind in the ebook, be it typos, grammar, or continuity, please don’t hesitate to email them to me immediately and we’ll get them corrected. We will, of course, be providing updated ebooks to those who have purchased them. This is a little unusual, but then, the book is a hefty monster that is going to run around 900 pages in the 6×9 format and given that you guys managed to find over 100 errors in each of the three EW novels published and line-edited by Pocket, I have no doubt we’ll miss a few howlers here.
Marcher Lord also asked me to remind those who are interested in buying the hardcover, but have not yet preordered it that the preorder discount offer will end on Monday, November 26th. Remember that in addition to the discounted price, those who have preordered the hardcover will receive the ebook when it comes out. Thanks to all of you who have preordered already.
In Chapter Two, Depression Economics, Krugman resorts to his favorite analogy, the babysitting coop, whose travails were chronicled by a 1977 article in the Journal of Money, Credit and Banking. This is at least the third book in which he has resorted to the analogy, this time to demonstrate that overall lack of demand can’t hurt the economy and that “your spending is my income and my spending is your income.” But this time, he also cites the 150 babysitting couples as an example of his proposed cure for the global economy
“That’s where we come to the third lesson from the babysitting co-op: big economic problems can sometimes have simple, easy solutions. The co-op got out of its mess simply by printing up more coupons.
This raises the key question: Could we cure the global slump the same way? Would printing more babysitting coupons, aka increasing the money supply, be all that it takes to get Americans back to work?
Well, the truth is that printing more babysitting coupons is the way we normally get out of recessions. For the last fifty years the business of ending recessions has basically been the job of the Federal Reserve, which (loosely speaking) controls the quantity of money circulating in the economy; when the economy turns down, the Fed cranks up the printing presses. And until now this has always worked. It worked spectacularly after the severe recession of 1981–82, which the Fed was able to turn within a few months into a rapid economic recovery—“morning in America.” It worked, albeit more slowly and more hesitantly, after the 1990–91 and 2001 recessions.
But it didn’t work this time around. I just said that the Fed “loosely speaking” controls the money supply; what it actually controls is the “monetary base,” the sum of currency in circulation and reserves held by banks. Well, the Fed has tripled the size of the monetary base since 2008; yet the economy remains depressed. So is my argument that we’re suffering from inadequate demand wrong?
No, it isn’t. In fact, the failure of monetary policy to resolve this crisis was predictable—and predicted. I wrote the original version of my book The Return of Depression Economics, back in 1999, mainly to warn Americans that Japan had already found itself in a position where printing money couldn’t revive its depressed economy, and that the same thing could happen to us. Back then a number of other economists shared my worries. Among them was none other than Ben Bernanke, now the Fed chairman.
So what did happen to us? We found ourselves in the unhappy condition known as a “liquidity trap.””
Krugman’s first claim is harmless enough. Obviously, an overall lack of demand can hurt the economy, those who erroneously insist that supply is always capable of creating demand notwithstanding. His second claim is partially true, but incomplete, because not all spending comes from income. A considerable amount of spending also comes from credit, but since that is neither part of the Neo-Keynesian aggregate model nor the babysitting coop story, Krugman simply omits it. And it can’t be denied that the babysitting coop did appear to get out of its impasse by printing more coupons.
However, Krugman is guilty of a significant omission when he claims that Fed inflation – cranking up the printing presses – worked spectacularly in ending the 1981-1982 recession. And what he omits is that one of the chief causes of the recession was the Fed’s need to slam on the brakes due to the rampant inflation of the 1970s, inflation that completely failed to cure the high rates of unemployment as it was supposed to according to conventional Neo-Keynesian economic theory. In fact, it was this failure that led to the widespread rejection of Neo-Keynesianism and the adoption of Milton Friedman’s monetarist spin on it.
Also, when Krugman claims that the Fed was cranking up the money presses in 1983, he omits to mention that throughout that year, which more than covers his “few months” the interest rate never fell below 10.5 percent, which is higher than it was at any time after November 1978! Somehow, we’re supposed to believe that observably tighter monetary policy amounts to cranking up the money presses!
That being said, the money supply did observably begin increasing in 1983. From mid-1982 to mid-1983, M2 rose $228 billion. However, L1, total credit, grew $598 billion over the same period.
Now, Krugman admits that tripling the monetary base has not succeeded in moving the economy out of depression. If the true lesson of the spring 1983 expansion is that credit, and not money supply is the issue, then we can assume that the current dearth of economic growth should be correlated with a similar lack of growth in Z1.
As it happens, that is precisely what we see. Z1 has been very nearly flat since 2008 and is currently $5 trillion lower than its 60-year historical rate of growth would predict. So, the basic foundation for Krugman’s case is not only incomplete and historically inaccurate, but flawed in precisely the way that those familiar with the Neo-Keynesian model would expect.
I’m going to take a slightly different approach to reviewing Paul Krugman’s latest book, End This Depression Now!. Ever since writing TIA, I have found it frustrating to read a book, accurately summarize the arguments it contains, critique those arguments, and then find myself addressing various complaints about my summaries and critiques from those who readily admit they have not read the book. This is particularly annoying because the percentage of people who actually bother to read a book appears to be a small fraction of those who are interested in discussing its contents and its implications.
So, instead of writing a general review and critiquing the summarized arguments, what I’m going to with this book is systematically highlight the 16 sections that I bookmarked and identify the specific claims being made as well as any fundamental flaws I believe are thereby revealed. This approach should make it easier for people to understand exactly what Krugman has written and reduce any derailing of the discussion on the basis of the supposed inaccuracy of my summaries. One could, if one liked, also consider this a 101 level course on Krugmanomics.
In Chapter Two, Depression Economics, Krugman explains his thesis:
“The central message of all this work is that this doesn’t have to be happening. In that same essay Keynes declared that the economy was suffering from “magneto trouble,” an old-fashioned term for problems with a car’s electrical system. A more modern and arguably more accurate analogy might be that we’ve suffered a software crash. Either way, the point is that the problem isn’t with the economic engine, which is as powerful as ever. Instead, we’re talking about what is basically a technical problem, a problem of organization and coordination—a “colossal muddle,” as Keynes put it. Solve this technical problem, and the economy will roar back to life.
Now, many people find this message fundamentally implausible, even offensive. It seems only natural to suppose that large problems must have large causes, that mass unemployment must be the result of something deeper than a mere muddle. That’s why Keynes used his magneto analogy. We all know that sometimes a $100 battery replacement is all it takes to get a stalled $30,000 car back on the road, and he hoped to convince readers that a similar disproportion between cause and effect can apply to depressions. But this point was and is hard for many people, including those who believe themselves well-informed, to accept….
What I hope to do in this chapter is convince you that we do, in fact, have magneto trouble. The sources of our suffering are relatively trivial in the scheme of things, and could be fixed quickly and fairly easily if enough people in positions of power understood the realities. Moreover, for the great majority of people the process of fixing the economy would not be painful and involve sacrifices; on the contrary, ending this depression would be a feel-good experience for almost everyone except those who are politically, emotionally, and professionally invested in wrongheaded economic doctrines….
Think of it this way: suppose that your husband has, for whatever reason, refused to maintain the family car’s electrical system over the years. Now the car won’t start, but he refuses even to consider replacing the battery, in part because that would mean admitting that he was wrong before, and he insists instead that the family must learn to walk and take buses. Clearly, you have a problem, and it may even be an insoluble problem as far as you are concerned. But it’s a problem with your husband, not with the family car, which could and should be easily fixed.”
In summary, Krugman is aggressively asserting that the problems with the U.S. economy are trivial, technical, and easily solved by the economic equivalent of changing a car battery by people in positions of power. He sees no serious structural economic problems stemming from the trade deficit, the demographic changes in the population, the educational system, the financial system, the shift to a service economy, or the record levels of public and private debt. He also expects that the process of fixing it will be close to painless for nearly everyone in the country. He does not, however, claim that it will be politically easy to solve the problem, in fact, the solution is a political one and primarily concerns overcoming those who are “invested in wrongheaded economic doctrines.”
Is everyone clear on this? Does anyone see any reason to take exception to this summary or claim I am erecting a strawman? I’ll also be interested to know your opinion of whether this approach is effective or not.
Paul Krugman has the solution to the economic crisis in his book published earlier this year. You’ll never guess what it is!
Spend Now, Pay Later
The basic situation of the U.S. economy remains now what it has been since 2008: the private sector isn’t willing to spend enough to make use of our full productive capacity and, therefore, to employ the millions of Americans who want to work but can’t find jobs. The most direct way to close that gap is for the government to spend where the private sector won’t. There are three common objections to any such proposal:
1. Experience shows that fiscal stimulus doesn’t work. 2. Bigger deficits would undermine confidence. 3. There aren’t enough good projects to spend on.
I’ve dealt with the first two objections earlier in this book; let me briefly summarize the arguments again, then turn to the third.
As I explained in chapter 7, the Obama stimulus didn’t fail; it simply fell short of what was required to offset the huge private-sector pullback that was already under way before the stimulus kicked in. Continuing high unemployment was not just predictable but predicted.
The real evidence we should be considering here is the rapidly growing body of economic research on the effects of changes in government spending on output and employment—a body of research that relies both on “natural experiments” such as wars and defense buildups and on careful study of the historical record to identify major changes in fiscal policy. The postscript to this book summarizes some of the major contributions to this research. What the work says, clearly and overwhelmingly, is that changes in government spending move output and employment in the same direction: spend more, and both real GDP and employment will rise; spend less, and both real GDP and employment will fall.
What about confidence? As I explained in chapter 8, there’s no reason to believe that even a substantial stimulus would undermine the willingness of investors to buy U.S. bonds. In fact, bond market confidence might even rise on the prospect of faster growth. Meanwhile, both consumer and business confidence would actually rise if policy turned to boosting the real economy.
One would probably have to read this book to believe the astonishing simplicity of his Neo-Keynesian approach. I could have written it in in a single page. Actually, I could have written in in a single sentence: More public debt and more government spending is the solution to this economic depression because government spending is capable of creating the jobs necessary to produce economic growth, while the resulting public debt is not a problem because any country with its own central bank can issue an infinite amount of it without any long-term costs.
I think what we are seeing here is the beginning of the death throes of Neo-Keynesian economics. They can’t assert that debt doesn’t matter at all anymore, since the conventional Samuelsonian argument was blown away by the growth of foreign debt and the financial crisis of 2008, so now Krugman and company have shifted to arguing that a certain and specific type of debt can be amassed infinitely. Time will soon prove this move of the goalposts to be false as well.
There is a lot to question in Krugman’s book and I will be addressing those questions over the next few weeks as I have 16 sections bookmarked. But this is the essential summary.
Hunter Riley, the author of a book on metal investing, is giving it away until Halloween. I get a lot of questions concerning the subject, so if you’re interested in metals, this would be a reasonable place for you to start. He writes:
I just wrote and published a book on Amazon.com about how to start
investing in gold and silver. I am giving the book away for free for 5 days starting this Saturday 10/27 and lasting until 10/31.
I thought your readers might appreciate a free kindle book on how to begin investing in gold and silver without getting ripped off.
It’s #1 in commodities and has good reviews, to say nothing of the fact that it’s impossible to beat the price. It normally goes for $9.99. Have a look if you’re so inclined.
In case you missed out on the previous offer, it may interest you to know that John O’Neill of Black Gate Magazine is giving away 25 free review copies of A Magic Broken at Black Gate. He emailed me to let me know he has a few left, so if you’d like a copy and are willing to write a review, please visit Black Gate.
Since so many people here were involved, I asked the cover artist, Kirk DouPonce, to share his perspective on the occasionally contentious process of creating the cover for A THRONE OF BONES. It turned out to be so interesting that I suggested posting it at Black Gate to John O’Neill, who readily concurred:
Over the past 17 years, I’ve gotten to design a pile of book covers, well over a thousand if my math is correct. And if I learned anything at art school, it was math. So when I say A Throne of Bones is my favorite cover so far, it does mean something….
Scientifically speaking, women read approximately a lot more books than men do. This is especially true when it comes to fiction. So when I design fiction covers for publishers, no matter what the genre, I know how important the female demographic is. Covers need to appeal to women. Simple enough.
Or not. I’m getting ahead of myself. Let’s start at the beginning of the process.
It hasn’t exactly been any great mystery, but I am happy to finally be able to share exactly what I’ve been up to for the last year. Last summer, after finishing A Dance with Dragons, I found myself deeply disappointed with what Mr. Martin, whose earlier work in the series I so enjoyed, had produced after making us all wait six years. “Good Lord, even I could do better than that”, I thought, which may not, strictly speaking, actually be true, but regardless, that was the thought that struck me after slogging through 1,100 pages of tedious river journeys, Tyrion “humorously” falling off pigs, and being subjected to Important New Characters for approximately the 4,853rd time. Being somewhat despondent about George Martin’s descent into Robert Jordan territory, I turned to other so-called epic writers, including Joe Abercrombie, R. Scott Bakker, Steve Erikson, Daniel Abraham, and Brandon Sanderson. Some of their books were quite good, others somewhat less so, but in no case did any of them provide me with that same sense of EPIC and wanting to experience the depths of the world that Martin presented so effectively in the first three books of A Song of Ice and Fire.
So, I decided that I would write an epic novel and I would do it in one year. It would be the same length as A Game of Thrones, it would be loosely based upon an interesting period in military history, (in case you didn’t realize it, the Wars of the Roses are the starting point for Martin’s series, Stark = York and Lannister = Lancaster), and its focus would be on story, world, and character. Nothing else. No cleverness, no preaching, no subtexts, no reinventing wheels, no larger lessons, no deep philosophical insights. In reading all the various would-be epics, I realized that most of them suffered from trying to do more than simply tell a fascinating story, which was also a problem with most of my previously published fiction. I assumed I would self-publish it, since obviously no one would want to publish such a monster, and I would set it in the world of Summa Elvetica since I rather liked that world, as did most of those who read that flawed, but interesting failure of an esoteric literary exercise. However, to do so, I needed to get the permission of Marcher Lord Press, the publisher of Summa, and much to my surprise, Jeff not only loved the idea of an epic series set in Selenoth, he insisted that he would publish it, even if it turned out to be more than 1,000 pages.
Umberto Eco once said that he wrote The Name of the Rose because he wanted to murder a monk. I decided to do him one better and begin by killing the Holy Father. That sets the stage for a story that is large and sprawling and is inspired by the Roman Social War, which is a little known quasi-civil war that was arguably the most perilous situation the Roman Republic faced in between the Gauls laying siege to the Capitoline Hill in 390 BC and Caesar crossing the Rubicon. Amorr isn’t Rome, of course, but the historical scenario provides the novel with a certain amount of structural verisimilitude that I have often found to be lacking in other books.
So, I’m very pleased to announce A THRONE OF BONES, the first novel in the series entitled Arts of Dark and Light, which will be published by Marcher Lord Press on December 1, 2012. We’re not sure of the final page count yet, but at 295,000 words, I expect it to be well over 750 pages. It will be available for $4.99 in ebook format and $34.99 in hardcover. There will be no paperbacks, trade or mass-market. Marcher Lord is accepting preorders for the hardcovers starting today; those who preorder will pay only $29.99 for the hardcover and they will also receive the ebook on December 1st. (We can’t say precisely when the hardcovers will ship, except that it is expected to arrive with time to spare for Christmas.) This preorder offer will be run from October 15th until November 30th. Also, since I wanted to provide those who are potentially interested in the book a less esoteric introduction to the world of Selenoth than the one provided by Summa Elvetica, I am pleased to announce the publication today of A MAGIC BROKEN, which is a 50-page novella featuring two of the perspective characters from the novel.
A MAGIC BROKEN is available from Amazon for 99 cents and the reviews to date are mostly positive. If you think you might be interested in A Throne of Bones, I would encourage giving the novella a whirl in the meantime. Here are a few of the comments from the first reviewers:
“a sword and sorcery tale with a cerebral bent”
“the two main characters are likable in their non-perfection”
“an entertaining, fast paced read”
“I found the story line to be unpredictable”
“The environment and characters are on par with the best of George R.R. Martin”
“Despite the number of twists it remains coherent and believable as they unfold”
“a masterful act of guile and misdirection reminiscent of the style of Umberto Eco”
“The world has a depth not found in much writing today.”
“the promise of it all leading somewhere grand and exciting is what interests me more than anything else”
Also, and I would argue this is a strong point in its favor, there are no river journeys, no “amusing” porcine-related pratfalls, and no whining. Actually, come to think of it, there is a little whining, but rest assured that the whiner speedily meets with a literary device that I devoutly wish Robert Jordan had utilized with regards to his character Rand al’Thor at an early stage in The Wheel of Time. In my opinion, Chapter One would have been about right.
Thanks are in order to JartStar, who created the cover for A Magic Broken and may even do the map for A Throne of Bones if I ever get my act together and get him the information he needs, as well as Jamsco, whose determined interest in Lodi not only inspired the novella, but his inclusion in the larger work as well. Thanks to Markku and the Original Cyberpunk, who between them made my foray into ebooks viable and without whom these books would never have been conceived. I also appreciate the reviewers, 15 20 of whom managed to read the novella and post their reviews over the weekend. I’m very appreciative of Kirk DouPounce, who somehow managed to surpass the very high standard he’d set with Summa – about which more later – of Jeff Gerke of Marcher Lord, who was enthusiastic about taking on yet another ludicrous literary risk, and most of all, of Spacebunny and her encouragement of my efforts.
I will be announcing two new works of fiction on Monday, both set in the world of Summa Elvetica. I’d like to get some reviews of the first one up on Amazon over the weekend, so I’m giving away 30 electronic review copies of the forthcoming 50-page(1) novella to those who are a) interested in my fiction, b) willing and able to post reviews on Amazon, and, c) not the Anklebiter of Many Names.
I’m not asking for mindless puffery or anything like that, just your honest perspective on the novella. So, if you’re interested, please fire off an email to me and I’ll send you the same epub that will be available Monday from Amazon, Barnes & Noble, and Kobo. If you don’t have an eReader, that’s not a problem, you can use Calibre to read it on your computer.
UPDATE: Okay, the thirty review copies are all spoken for. Thanks very much to everyone who responded so readily.
(1) Page count isn’t really meaningful for an ebook, but the novella is 20,000 words. At the standard 400-word page of a trade paperback, that’s about 50 pages.
